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The federal government has seized the real estate holdings of James Zhong, a Georgia resident convicted recently in the theft of a massive amount of bitcoin.
Zhong held an 80% stake in RE&D Investments, a Memphis developer.
RE&D, which was active in mixed-use development in Memphis, was forced into bankruptcy in September by creditors alleging they had not been paid.
Memphis developer Clayton Kemker, who owns the remainder of RE&D, told Bloomberg that Zhong told him he’d acquired his bitcoin fortune via “ground-floor mining” in the cryptocurrency's early days, and expressed surprise at the criminal origin of Zhong's crypto holdings.
Zhong pleaded guilty on Friday to wire fraud. He defrauded Silk Road, an online marketplace formerly used for trading illicit drugs and cryptocurrency, out of a large stash of bitcoin in 2012.
In connection with the case, law enforcement seized about 50,676.17 bitcoin last November, then valued at over $3.36B (currently, that amount of bitcoin would trade for about $985.8M).
This was at the time the largest cryptocurrency seizure in the history of the U.S. Department of Justice, and is still the department’s second-largest financial seizure ever, according to the government.
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